Asked by
Melissa Hernandez
on Dec 01, 2024
Verified
The production function is given by f(x) = 4x1/2.If the price of the commodity produced is $100 per unit and the cost of the input is $15 per unit, how much profit will the firm make if it maximize profits?
A) $2,666.67
B) $1,331.33
C) $5,337.33
D) $2,651.67
E) $1,336.33
Production Function
A mathematical representation showing the relationship between inputs used in production and the output generated from those inputs.
Profit
The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.
Commodity
A fundamental product utilized in trade that can be exchanged with other products of similar kind.
- Learn the connection that exists between the expenditure on inputs, the setting of prices for outputs, and the ultimate maximization of profit.
- Adopt production functions to identify the perfect quantities of inputs for heightened profit levels.
- Identify how fluctuating input and output prices affect the strategic calculation of inputs to maximize profits.
Verified Answer
YW
Learning Objectives
- Learn the connection that exists between the expenditure on inputs, the setting of prices for outputs, and the ultimate maximization of profit.
- Adopt production functions to identify the perfect quantities of inputs for heightened profit levels.
- Identify how fluctuating input and output prices affect the strategic calculation of inputs to maximize profits.